A comprehensive news report reveals that the Kenyan government plans to reintroduce several tax measures from the previously withdrawn Finance Bill 2024, now divided into three separate bills. Here’s what every Kenyan needs to know:
Key Changes Coming:
Digital Marketplace Expansion
- Now includes ride-hailing, food delivery, and freelance services
- Aims to bring digital platform owners into the tax system
New Digital Tax Rate
- Significant Economic Presence Tax to replace Digital Service Tax
- Rate increases from 1.5% to 6% for non-resident digital operators
Pension Contribution Changes
- Monthly limit increased to Ksh 30,000
- Annual ceiling rises from Ksh 240,000 to Ksh 360,000
Infrastructure Bond Changes
- New 5% tax on interest earned
- Ends previous tax-free status
Remote Workers Requirements
- Mandatory KRA PIN for Kenyans working remotely
- Applies to those working for Kenyan employers
Public Supply Withholding Tax
- 0.5% for resident suppliers
- 5% for non-resident suppliers
Multinational Company Tax
- 15% minimum rate for large companies
- Applies to firms with Ksh 100 billion annual turnover
Tax Relief Updates
- Housing Levy and SHIF contributions to become tax-deductible
- Aims to reduce overall tax burden
Government’s Perspective:
Treasury CS John Mbadi states these measures will:
- Help bridge the Ksh 346 billion deficit
- Promote economic growth
- Enhance revenue collection
What’s Different This Time:
- Government provides detailed public explanations
- Bills split into three separate pieces of legislation
- More transparent communication approach
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